With the May 23 announcement that the Tokenized Protocol Beta had publically released, a world of new possibilities was created for the Bitcoin SV (BSV) blockchain. CoinGeek.com reached out to James Belding, CEO and founder of Tokenized, to help explain what potential this news holds.
The Tokenized Protocol works right out of the box, making it an easy to use resource for developers. We asked Mr. Belding what sets it apart from other token solutions on the market. “The distinguishing factor that separates the Tokenized Protocol from other token solutions, is a design philosophy that focuses on providing maximum utility for issuers and users,” he answered. “This philosophy led us to a solution that optimized around a simple truth that seems to be missed by a lot of the blockchain industry.
“That simple truth is that organizations must comply with the laws and regulations of the jurisdiction they reside in. Building the technology around a sensible assessment of these solution requirements allows for a token system that is much more expressive, performant, secure and lower cost than competing solutions.”
What really makes the protocol special is that it takes care of many of the hurdles a business might face. “The Tokenized Protocol provides organizations with all of the tools they need to create real, lawful and binding smart contracts that are recognizable and enforceable by the courts, and you won’t need a team of specialist developers to code up the smart contract,” Belding explained. “We have provided everything necessary at the protocol level to ensure that issuers are guided towards including all the critical metadata required to successfully create a valid smart contract with tokens representing the ownership of real assets.”
We wondered what can make a protocol inherently regulation friendly. “The Tokenized Protocol has built-in tools that allow issuers to freeze, thaw, and confiscate tokens,” he responded. “These are really important tools that most issuers will need to practically manage their tokens. However, they are also incredibly important tools for issuers to enable them to comply with court orders and warrants. That is a really important point because the moment a token is no longer recognized by the issuer or legal system as a legitimate ownership record and it can’t be confiscated, canceled or reconciled, then there must be a parallel record keeping system that is used to track which tokens are ‘legitimate’ and which are not.”
It goes beyond these simple but useful tools though, and provides a lot of power for potential smart contracts. “The Tokenized Protocol also provides the structure to allow Identity Oracles to interact with smart contracts,” he explained, and then elaborated:
“This system allows issuers to comply with regulations in their jurisdiction by restricting the transfers of tokens to addresses that are approved by the nominated Identity Oracle, even in secondary trading. Token transfers can be restricted according to different criteria specified by the issuer, and the transfer proposals are validated by the Identity Oracle in a pseudonymous manner, such that users’ private data is kept private. Tokens can be restricted to the following types of users: users who have had their identity verified, accredited investors, users that live in a certain region, and even users of a certain age group.
“These tools allow an issuer to comply with any reasonable request a government agency/regulator could ask for, while still providing all of the benefits of a decentralized ledger.”
A feature of the protocol is customizable voting systems. We asked how this works, and how it could be applied to real scenarios. “The Tokenized Protocol allows for smart contract managed on-chain governance,” he said. “There are many features that we will reveal in time, but the most important feature allows token holders to cast on-chain ballots. The ballots are cast in the same way that a bitcoin transaction is spent, and therefore, fundamentally enjoys the same security and privacy. All of the vote results are published to the public and immutable ledger so that all voters are able to ensure their vote was cast and counted correctly. The system is flexible enough to handle nearly any type of vote.”
This is an exciting potential feature for corporate enterprises, who can now understand their shareholders much better. Belding said, “Shareholders are often required to vote in shareholder resolutions to direct the company on certain matters. The Tokenized Protocol would make this process publicly auditable, low cost and very convenient.”
It’s been quite a year for Tokenized, first winning CoinGeek’s tokenization challenge, and then making big waves at CoinGeek Week in London. We asked them what’s coming next for the team. “It has definitely been a busy year for the whole team, but a memorable one,” Belding reflected. “We’re all working on our dream project and we couldn’t be more excited about what the future holds in store for Bitcoin SV.
“We’re currently working hard to build a platform that allows all types of organizations to issue, manage and trade tokens, with a very easy to use interface. There are a few more projects that we are also working on, but I’m going to keep tight-lipped about those until we are ready to announce.
“However, I promise you we are pushing the envelope and we can’t wait to share our projects with the world. Unfortunately, I can’t give an exact release date on anything at the moment, but we are driving as hard as we can and I would expect a number of big announcements from us over the next 4-12 months.”
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